EVERYONE today seems to be talking about the weak real estate market, the widespread mortgage problems and the volatile stock market, especially economists and national news analysts. There is no doubt that the housing down turn has been significantly more dramatic and that the projections for a recovery further out than originally forecast. But it does seem like overkill to me.
Here in the Lake Norman and greater Charlotte area the same news sources have now officially declared that we are, in fact, also experiencing a downturn. The reason they are just now declaring this is because they get their real estate sales numbers so slowly. If you notice, they are talking about June numbers when we are almost in to August. So, allow me give you the scoop as of today, July 26, 2007!
The most telling negative sign about the Lake Norman real estate market right now is the increasing inventory of active residential listings at a time when we are heading in to August which is historically one of our slowest months of the year. High inventory equals softer prices; it is that simple. But it is never wise to assume that all properties are equally impacted. The fact is, there are properties that are selling very quickly and for very close to the asking price. The key is to know your own individual market and price accordingly.
Now I admit, I love analyzing our market. There are so many ways to look at the Lake Norman market: by price point, by lot type (waterfront, view, golf course), by subdivision, by town, by number of bedrooms, square footage, ranch VS two-story, Master up VS Master down. Well, you get the idea. But for the purposes of potential sellers and buyers I think the greatest tool is a price range comparison. (See my quarterly Sales Analysis as well).
As of this morning, we had 1338 active listings in the greater Lake Norman area, slightly more than the 1300 we had on July 1. The average days a listing was on the market held steady at 115 days, the average sales price was $452,677, and we have about an 8.3 months of supply of active listings based upon our current listing and sales numbers. A balanced market has 6 months supply which means we are technically in a buyers market.
Today’s Lake Norman “Hot Sheet” Summary (of the past two weeks)
- New Listings: 279
- Properties that are back on market because their sales contract was canceled: 102
- Price Changes/Reductions: 294 (ouch!)
- Listings Withdrawn from the MLS: 99 (another ouch!)
- Solds (closed) 128
- Pendings, Conditional and Contingent sales: 224
These numbers are a bit worrisome because almost as many properties canceled their contracts as closed them (102 VS 128). Keep in mind that the “solds” represent closed sales which were probably opened 30-45 days ago. The Pendings, Conditional and Contingent sales would be more recent and better reflect our current month’s market. About 50 more properties were listed in the past two weeks than went under contract which is why our number of active listings keeps growing.
What is happening in the different price ranges?
- $1-$300,000: Definitely our strongest price range; we have a 3 Months of supply of listing. First time and relocating buyers are here!
- $300,000 – $499,000: Second strongest price range; about 7 Months of supply of listings, average days on the market was 105
- $500,000’s : 7.5 Months of supply but 220 days on the market on average…this is very high!
- $600,000’s: A whopping 15 months of supply of listings and the average time on the market was 301 days! NOT GOOD! (Actually, the worst)
- $700,000’s: 8.9 Months of supply on hand and the average days on market was 162
- $800,000’s: 11 Months of supply on hand and the average days on market was 97 (not too bad!)
- $900,000’s: 5 months of supply on hand and 172 days on the market
As has been the case all spring, the trade-up price ranges of $500,000 to $800,000 are particularly slow.
So what does all this mean to someone who is considering listing their property? If you are in the lowest price range I’d say go for it! If you are in the trade-up price ranges and don’t have to sell, you might want to wait until next spring in hopes of a stronger market. No matter what price range, I can’t emphasize enough the importance of having good curb appeal, being in move-in condition and being priced properly. This is definitely NOT the market in which to “test” a higher price. Nor is it the market for an “AS IS” sale unless the price is heavily discounted.
Buyers can and should be choosy in this market. In a slow market, things that buyers were willing to overlook in a hot market like traffic noise, power lines, and less desirable neighborhoods, are now liabilities. That is why I always ask my buyers to consider the inherent weaknesses and resale value of a property before they buy. I don’t want them finding out when it is time for them to sell that what may not have bothered them when they bought the property is,in fact, a serious liability in a slow market and will impact not just the sales price but the ease or difficulty of selling..
Lake Norman and the greater Charlotte area are sitting on a strong economic foundation. People and businesses are moving here from all over the country. While our real estate market has been impacted by the national downturn and rising interest rates our area’s continued growth and ability to attract new businesses will protect our real estate market and drive it forward in the future.